Question

Question 200.72 pts

The reality of consumer optimum means making choices in countless purchases in order to enjoy

increasing degrees of satisfaction.

a balanced budget.

the same level of satisfaction in each.

roughly the same utility per dollar spent.

the same standard of living.

Question 190.72 pts

Freda and Stefano are presented with two dessert options: ice cream or cookies. Freda values ice cream at 5 utils and cookies at 10 utils. For Stefano, it’s 10 and 5, respectively. What can we assume with certainty?

Stefano prefers cookies over ice cream.

Freda prefers cookies, and Stefano prefers ice cream.

Freda’s preference for cookies is equal in magnitude to Stefano’s preference for ice cream.

Freda prefers ice cream of over cookies.

Freda’s preference for ice cream is equal in magnitude to Stefano’s preference for cookies.

Someone who is not a “morning person” is often heard saying, “I’m cranky until I’ve had a cup of coffee.” After that first cup of coffee (and a mood improvement), the person experiences the uncommon phenomenon of ________. That is, of course, until the stress of a typical day takes its toll.

increasing marginal utility

rare utility

rebounding utility

constant marginal utility

decreasing marginal utility

Answer 1

1. roughly the same utility per dollar spent
(Consumers try to optimise their purchases by getting roughly the same utility per dollar spent on different goods)

2. Freda prefers cookies, and Stefano prefers ice cream.
(Freda assigns higher utils to cookies Stefano assigns higher utils to ice cream so Freda definitely prefers cookies and Stefano definitely prefers ice cream)

3. increasing marginal utility
(After a cup of coffee, his marginal utility increases, which is an uncommon phenomenon, until stress of day breaks and marginal utility again starts declining)